By John Pierre Saliba - Senior Finance Broker - April 2026
Australian businesses have more financing options in 2026 than ever before. The challenge is not finding funding - it is finding the RIGHT type of funding for your specific situation. The wrong product costs you money in unnecessary interest, fees, and lost opportunities.
This guide covers every business financing option available to Australian SMEs, ranked by speed, cost, and suitability. Whether you need $10,000 for a cash flow gap or $500,000 for growth, there is a product that fits.
We'll recommend the best product for your situation. Free, no obligation.
Check eligibility → Call 02 8046 3933| Product | Amount | Speed | Rate | Security | Best for |
|---|---|---|---|---|---|
| Business overdraft | $10K-$500K | Same day | 14.55-25% | None | Ongoing cash flow |
| Line of credit | $10K-$500K | Same day | 14.55-25% | None | Flexible access |
| Term loan | $5K-$500K | Same day | 12-35% | None | One-off purchases |
| Working capital loan | $5K-$500K | Same day | 12-22% | None | Short-term ops costs |
| Invoice finance | Up to 85% of invoices | 3-7 days | 1-3% per invoice | Invoices | B2B debtor delays |
| Equipment finance | $5K-$1M+ | 1-5 days | 5.5-12% | Equipment | Asset purchases |
| Merchant cash advance | $5K-$500K | 1-3 days | Factor 1.1-1.5 | Card sales | Retail/hospitality |
| Bank secured loan | No cap | 4-8 weeks | 5.99-12% | Property | Large, established |
| Government grants | $5K-$500K | Months | 0% (grant) | None | Innovation/export |
A business overdraft is a revolving facility that gives you access to funds up to an approved limit. You draw when you need cash and repay when revenue comes in. Interest is charged only on the amount drawn, not the full limit. When you repay, the funds are available again without reapplying.
Best for: Businesses with recurring, unpredictable cash flow needs - payroll gaps, supplier timing, seasonal dips, tax bills, growth funding. This is the most versatile business financing option.
Amount: $10,000 to $500,000 unsecured.
Rate: 14.55% to 25% p.a. (unsecured, non-bank). All interest is tax deductible.
Speed: Decisions from 1 hour. Same-day funding available.
Requirements: 6 months trading, $6K+/month revenue, Equifax 550+, bank statements only. No tax returns required.
A business line of credit works almost identically to an overdraft - revolving, flexible, interest on drawn amounts only. The technical difference is that a line of credit may be a separate facility rather than linked to your transaction account. Most non-bank lenders treat them interchangeably.
Best for: Same as overdraft - ongoing working capital needs with flexible draw and repay.
Complete line of credit guide | Line of credit vs overdraft comparison
A business term loan gives you a lump sum with fixed repayments over 6 to 24 months. Unlike revolving facilities, you receive the full amount upfront and repay on a set schedule. Interest is charged on the full balance from day one.
Best for: One-off purchases with a known cost - equipment, vehicles, fitouts, buying a business, or any expense where you know exactly how much you need.
Amount: $5,000 to $500,000 unsecured.
Rate: 12% to 35% p.a. depending on lender and profile.
Overdraft vs term loan comparison
A working capital loan is a short-term term loan specifically designed for operational expenses. It bridges the gap between money going out (wages, rent, suppliers) and money coming in (client payments, sales revenue).
Best for: Known short-term cash gaps with a defined timeline. For example, needing $30K to cover payroll this week while waiting for a $50K invoice to be paid next week.
Invoice finance (also called invoice factoring or debtor finance) advances you 70-85% of your outstanding B2B invoices immediately. When your client pays, the financier releases the balance minus their fee.
Best for: B2B businesses with large outstanding invoices and long payment terms (30-90 days). Common in construction, recruitment, manufacturing, and professional services.
Cost: 1-3% per invoice as a factor fee. Can be cheaper or more expensive than an overdraft depending on your invoice volume.
Downside: Your clients may need to be notified. Only works for B2B invoices.
Equipment finance is a secured loan specifically for purchasing business assets - vehicles, machinery, tools, technology, fitout. The equipment serves as security, which means lower rates than unsecured products.
Best for: Any business buying physical equipment. Claim the $20K instant asset write-off before 30 June 2026.
Rate: 5.5% to 12% p.a. because the asset secures the loan.
A merchant cash advance provides a lump sum in exchange for a percentage of your future card (EFTPOS) sales. Repayments are taken automatically as a fixed percentage of each day's card revenue.
Best for: Retail and hospitality businesses with consistent daily card sales.
Downside: Expensive. Factor rates of 1.1-1.5 mean you repay 10-50% more than you borrow.
If you own property and can wait 4-8 weeks, a secured bank loan offers the lowest rates (5.99-12% p.a.). Banks like CBA, NAB, ANZ, and Westpac all offer secured business facilities.
Best for: Established businesses (2+ years) with property security who prioritise rate over speed.
Requirements: Full financial statements, tax returns, property valuation, credit score 600+.
Federal and state government programs offer grants, low-interest loans, and co-funding for eligible businesses. These are competitive, slow (months to process), and have strict eligibility criteria. They are worth exploring alongside commercial finance but should not be relied on as your only option.
Need ongoing flexible cash flow? Business overdraft or line of credit.
Need a lump sum for a specific purchase? Business term loan.
Clients paying late on invoices? Invoice finance.
Buying equipment? Equipment finance.
Need the absolute lowest rate and can wait? Bank secured loan.
Not sure? Call 02 8046 3933 or check your eligibility. John Pierre Saliba (Bachelor of Business and Commerce, Advanced Diploma in Financial Planning, MFAA, AFCA, ACL 511092) will recommend the right product for your situation - and if we are not the right broker for your needs, we will tell you.
Over 60% of businesses that come to OverdraftMe have been using credit cards for working capital. Switching to an overdraft eliminates the 1.5-2% merchant surcharge on every transaction and makes all interest tax deductible. On $100K/year in supplier payments, that saves $1,500-$2,000 in surcharges alone.
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